Ohio Health Lawyer & Attorney : Jayne Juvan : Benesch Friedlander Law Firm : Serving Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton, Parma, Youngstown, Canton, and Lorain OH

The appearance of the typical patient in the 21st Century departs significantly from that of the average patient in the 20th Century.  These days, many patients visit their medical providers armed with diagnosis and treatment options in one hand, and pricing information kept secret for years in the other--most of which is information obtained from a slew of sources on the internet.  Individuals from all ends of the spectrum have come together to discuss the pros and cons of these "brainsuckers" (a phrase coined by Dr. Scott Haig for those patients who research their symptoms).  By all accounts, it seems that the United States Congress will take the opportunity to chime in on the debate, too.

An article published by American Medical News  entitled "Bill Aimed to Improve Health Literacy," caught my attention today because it discussed legislation introduced in the United States Senate directed to further educate consumers about their health.  S.2424 aims "to ensure that all Americans have basic health literacy skills to function effectively as patients and health care consumers." 

According to American Medical News, the legislation, if passed, "would establish a health literacy implementation center to gather and disperse information and to devise national improvement strategies." The center would be charged with the development of a health literacy curriculum for elementary and secondary schools, colleges and adult education programs.  According to the article, the American Medical Association backs the legislation.

I'm generally a proponent of the educated consumer and believe that there could be far-reaching benefits to the legislation.  Given the lively debate on these issues, however, I'd be interested in hearing the opinions of others who disagree.

• Print
• Comments (1)
• Trackbacks

According to a company press release, on July 2, 2007, Manor Care (NYSE: HCR) announced board approval of an all cash $6.3 billion dollar transaction with Carlyle Group to take the company private.  The deal contemplated that shareholders would receive $67.00 per share, a twenty percent premium in relation to the closing price on April 10, a day before the company announced it would "evaluate strategic alternatives," and thereafter received shareholder approval. 

The timing of the transaction comes amidst increased state and federal scrutiny of private equity fund buyouts of nursing homes.  This transaction and others similar signal a shift in nursing home deals--not only in the sense that consolidation and ownership by private equity funds is becoming more prevalent as the baby boomers are set to retire, but also in the sense that regulatory scrutiny of transactions involving the facilities may be different, and perhaps more vigorous, than it has in the past.

Recently, the New York Times ran a string of articles addressing the new issues arising out of consolidation and fund ownership, including:

• Nursing Home Buyouts Face Scrutiny (From the New York Times Deal Book) (“Nursing homes aren’t just investment vehicles,” Mr. Baucus said in a statement. “They’re homes for some of America’s most vulnerable citizens.”)
• Inquiries at Investor Owned Nursing Homes  (“There are serious concerns that private equity firms are reducing the care at nursing homes by decreasing the number of employees,” Mr. Dingell said. “We’ve been made aware that nursing home residents are losing their ability to use lawsuits to fight poor care, and that people may be suffering.”)
• At Many Homes, More Profit, Less Nursing ("But in recent years, large private investment groups have agreed to buy 6 of the nation’s 10 largest nursing home chains, containing over 141,000 beds, or 9 percent of the nation’s total. Private investment groups own at least another 60,000 beds at smaller chains and are expected to acquire many more companies as firms come under shareholder pressure to sell.")

Transactions such as the proposed Manor Care/Carlyle deal often trigger prior approval and notification reporting requirements.  For example, many states require that, upon a change of ownership at the operating company level, the entering operator must apply for a new license.  Some states also require that the new entity obtain a certificate of need before the transaction may close.  As you might expect, the regulatory process is often fairly involved, requiring the submission of ownership information, information about the incoming management team, a demonstration of financial solvency sufficient to maintain the facilities, and staffing numbers.  Many times, the applications are deemed incomplete by regulators, requiring that the applicant submit further information to satisfy the regulators' questions and thereby requiring that the closing date be pushed back.    

In the Manor Care/Carlyle transaction, a few state officials and regulators have indicated a desire to more closely scrutinize the deal, delaying the closing date.  In an unprecedented move, the State of West Virginia Health Care Authority granted the requested certificate of need, but then rescinded the decision shortly thereafter in response to an appeal filed by the Service Employees International Union. In an article published by the State Journal, Rick Rump, assistant vice president of corporate communication at Manor Care, is quoted as stating, "No other state approved a certificate of need and then stayed the process, and it's the first time in West Virginia, too. They've never granted a CON and then rescinded it," Rump said. "It's an odd precedent."   The Health Care Authority will hold an administrative hearing at 9 a.m. Dec. 14 at 100 Dee Drive, Charleston to reconsider its decision.

 

• Print
• Comments
• Trackbacks

The Healthcare Update News Service has made available a presentation entitled "Business Strategy in the Medicare Market: The Wall Street Perspective."  The presentation was given at the Medicare Congress in October 2006 by three individuals deemed to be a few of Wall Street's finest health care analyists, including:

• Charles Boorady, Managing Director, Citigroup Investment Research, New York, NY;
• Benjamin Edmands, Principal, JP Morgan Partners LLP, New York, NY; and
• Christopher McFadden, Healthcare Analyst, Goldman Sachs, New York, NY.

The panel discussion focused, at least in part, on investments in the health care sector, valuation of health care businesses and whether you can "trust the government as a partner," whether the government will pursue a single payer system, and insight into Wall Street chatter about the health care sector.  The speakers also touched on issues affecting the pharmaceutical industry, including Medicare Part D.

• Print
• Comments
• Trackbacks

On Friday, Michael Leavitt, the Secretary for the Department of Health and Human Services, outlined a plan for "personalized health care," which is defined in the press release as "gene-based medical care combined with health information technology."  Speaking of this new initiative, Leavitt stated, "Personalized health care will combine the basic scientific breakthroughs of the human genome with computer-age ability to exchange and manage data . . . . Increasingly, it will give us the ability to deliver the right treatment to the right patient at the right time--every time."  While Leavitt advocates for advances to this program, privacy rights activists would likely prefer that the phrases "gene-based medical care" and "health information technology" not be used in combination.

Leavitt's announcement also outlined several steps that must be taken to reap the benefits of this powerful combination, including the following:

• reviewing the implications on privacy protection and the "anticipated effect on the confidentiality, privacy and security of individually identifiable health information";
• taking steps to ensure that genetic tests are accurate and reliable;
• developing "consistent policies for [HHS] agencies regarding access to and security of federally supported research"; and
• receiving recommendations from the American Health Information Community for health information technology standards applicable to genetic testing information.

Leavitt called the development of a personalized health care system one of his priorities for the next two years. 

Additional Resources:

United States Department of Health and Human Services Personalized Health Care Page

• Print
• Comments (1)
• Trackbacks

FDA News reported last week that Michael Leavitt, the Secretary of the Department of Health and Human Services, speaking at the annual PhRMA board meeting,recommended that the United States health care system be modeled after Medicare Part D, calling the new prescription drug program a "resounding success."  Specifically, Leavitt asserted that competition and quality standards should control and that consumers should have the ability to compare prices.  Moreover, experts "should establish an average price for an episode of care--a combination of procedures that a patient may need."

Leavitt is correct in stating that Medicare Part D has been a success and that competition has driven prices down significantly.  In theory, modeling the entire health care system against Medicare Part D sounds promising.  Nevertheless, Medicare Part D has been criticized because the program's complexity requires that seniors have assistance from someone with significant knowledge of the intricacies to enroll and therefore is a barrier to those who have insufficient resources.  At least arguably, this complexity may only be exacerbated if the same formula is applied to the entire health care system.  While Medicare Part D could serve as a starting point for think tanks, it seems premature to have the program serve as a model for the entire health care system. 

 

• Print
• Comments
• Trackbacks

Generics--Drug Sales--Quality of Care

Here's a look back at a few noteworthy stories from last week...

• Biotech Generics.  Last week, FDA Commissioner Andrew von Eschenbach delivered a blow to makers of generics when he noted that generic versions of biotech drugs, which are generally more complex than chemical-based drugs and therefore more difficult to copy, will only be considered "similar" to brand name drugs.  As reported by the Washington Post, von Eschenbach stated at the PhMRA annual meeting, "We recognize that the end point would be what could be best described as similarity. Similarity in the sense that when a doctor gives you the product _ delivered it to a patient _ it will achieve an effect that is similar to the effect that we expected from the innovative . . . compound."  While the FDA is developing guidelines to evaluate generic versions, the Generic Pharmaceutical Association pointed out that the FDA does in fact have the "scientific knowledge to approve knockoffs, just as it now can sign off on the changes made by brand-name biotech companies in how they produce their drugs." 
• Drug Sales Increase in 2006.  IMS Health reported a 8.3% increase in drug sales last year and projects growth by 6-9% through 2010.  Diana Commy, corporate director, IMS Market Insights, commented on last year's growth by saying, “This growth was driven by factors that include an aging population and the introduction of the Medicare prescription drug benefit, which increased prescription coverage to the previously uninsured and underinsured, and provided generous plan benefits to seniors.” 
• JAMA Highlights Health Care Access and Quality of Care Issues.  On Wednesday, as reported by the Kaiser Family Foundation, the Journal of the American Medical Association published articles discussing access to health care and quality of care.  Here's a few of the conclusions reached in the articles:
  • "Patients without health insurance are less likely to receive treatment after injuries or diagnoses of chronic diseases."
  • "Patients in many cases do not receive necessary follow-up care, regardless of whether they have health insurance."
  • "Physicians should work in teams and measure the quality of care provided to patients to help reduce costs and reduce other problems in the U.S. health care system."
  • Spending on emergency care for recent documented and undocumented immigrants accounted for less than 1% of the North Carolina Medicaid budget annually between 2001 and 2004."

• Print
• Comments
• Trackbacks

Last week, I visited Orlando, Florida for the American Health Lawyers Association Long Term Care in the Law Conference.  This week's Health Law Recap will focus on a few themes and trends identified at the Conference. 

• Shift in Long Term Care Reimbursement.  Leslie Norwalk, the Acting Administrator for the Centers for Medicare and Medicaid Services (CMS), focused on the increased pressure on the federal government resulting from the health financing crisis.  In response, federal reimbursement for long term care will shift in favor of home health agencies and away from skilled nursing facility care.
• Employee Education About False Claims Act.  Many attorneys expressed to representatives of CMS that there continues to be substantial and noteworthy ambiguities in connection with the Deficit Reduction Act employee education requirements.  One attorney noted that the requirement applies to an entity that has less than 5 million dollars in Medicaid payments if the entity is affiliated with other entities that receive 5 million or more in such payments.  Representatives for CMS have promised that further clarification will follow shortly.
• Plaintiffs' Lawyers Use Web Sites, E-Mail Addresses to Pierce the Corporate Veil.  There has been a strong trend for parent companies who acquire nursing home facilities to form separate subsidiaries to act as holding companies and operating companies for each nursing facility acquired.  One prominent defense attorney noted that plaintiffs' lawyers have begun to cite to web sites and e-mail addresses to build a case for veil piercing.  The lawyer cautioned that employees in each separate company should have different e-mail addresses. For example, if the parent company is named "Health Care Solutions, Inc.," one subsidiary is named "Brecksville Health Care Solutions, Inc."  and the other is "Madison Health Care Solutions, Inc.," the employees at the parent and both subs should not have their e-mail address as "employeename@healthcaresolutions.com."  Instead, the following e-mail addresses would help to show that the three entities are separate legal entities:
  • Parent Company:  employeename@healthcaresolutions.com
  • Brecksville Health Care Solutions, Inc:  employeename@brecksvillehealthcare.com
  • Madison Health Care Solutions, Inc:  employeename@madisonhealthcare.com

In addition, the attorney noted that legal counsel should review a company's web site and that the web site should clearly state that each facility is owned by a separate legal entity.

• Medicaid Fraud Enforcement Is on the Rise.  Many representatives of the federal government emphasized that, in the upcoming years, the government will have increased budgets to implement Medicaid fraud controls and pursue Medicaid fraud investigations.  In the past, Medicaid has not received the same scrutiny as have other federal health care programs. 

 

• Print
• Comments
• Trackbacks

The Kaiser Family Foundation has made available a webcast entitled "The Future of Medicaid:  Is It Sustainable, and Should It Be Reformed?"  The webcast features the following speakers:

John Iglehart Founding Editor, Health Affairs National Correspondent, New England Journal of Medicine Session Moderator

David Rousseau, M.P.H. Principal Policy Analyst, Kaiser Family Foundation's Commission on Medicaid and the Uninsured Director, statehealthfacts.org

Richard Kronick, Ph.D. Professor and Chief Division of Health Care Sciences University of California, San Diego

John Holahan, Director, Health Policy Center, Urban Institute

Alan Weil, J.D. Executive Director National Academy for State Health Policy

Jean Lambrew, Ph.D. Senior Fellow, Center for American Progress  Associate Professor for Health Policy, George Washington University

Howard Cohen, Attorney HC Associates

• Print
• Comments
• Trackbacks

A study conducted by the Kaiser Family Foundation and the Harvard School of Public Health found that 56% of seniors enrolled in a Medicare prescription drug plan have a favorable impression of the drug benefit. 

Continue Reading...

• Print
• Comments
• Trackbacks

Benesch Friedlander Coplan & Aronoff, LLP announced today that Jayne Juvan's podcast entitled "Blogging for Lawyers" will air on DJ Flash Ferenc's radio show this Saturday morning between 10 and 11 a.m. on WERE.  Make sure to tune in! 

Benesch's podcast series "The Benesch Beat" was developed by Mark Avsec, an Intellectual Property lawyer at Benesch who is known for being a former keyboardist for Wild Cherry and a Grammy nominee for the hit song "Play that Funky Music, White Boy." 

• Print
• Comments
• Trackbacks

Make sure to obtain your copy of the October 2006 issue of Inside Business, which offered an article about Juvan's Health Law Update (see page 20).  The latest issue also included many other interesting articles, such as an article about Jack Landskroner, an attorney who brought a class action suit on behalf of plaintiffs who were injured when they had medical procedures performed that included the use of illegally harvested tissue, bones and organs, and a write-up on Dr. Delos "Toby" Cosgrove, the CEO and President of the Cleveland Clinic.

• Print
• Comments
• Trackbacks